Philips 2015 Annual Report Download - page 178

Company nancial statements 13.5
178 Annual Report 2015
13.5 Independent auditor’s report
To: The Annual General Meeting of Shareholders of
Koninklijke Philips N.V.
Report on the audit of the nancial statements
2015
Opinion
In our opinion:
•the consolidated nancial statements give a true and
fair view of the nancial position of Koninklijke Philips
N.V. as at December 31, 2015, and of its result and its
cash ows for 2015 in accordance with International
Financial Reporting Standards as endorsed by the
European Union (EU-IFRS) and with Part 9 of Book 2
of the Netherlands Civil Code;
•the company nancial statements give a true and fair
view of the nancial position of Koninklijke Philips
N.V. as at December 31, 2015, and of its result for 2015
in accordance with Part 9 of Book 2 of the
Netherlands Civil Code.
What we have audited
We have audited the nancial statements 2015 of
Koninklijke Philips N.V. (the Company), based in
Eindhoven, the Netherlands. The nancial statements
include the consolidated nancial statements and the
company nancial statements.
The consolidated nancial statements comprise:
1. the consolidated balance sheet as at December 31,
2015;
2. the following statements for 2015: consolidated
statements of income, comprehensive income,
cash ows and changes in equity for the year then
ended; and
3. the notes comprising a summary of the signicant
accounting policies and other explanatory
information.
The company nancial statements comprise:
1. the company balance sheet as at December 31,
2015;
2. the company statements of income and changes in
equity for 2015; and
3. the notes comprising a summary of the signicant
accounting policies and other explanatory
information.
Basis for our opinion
We conducted our audit in accordance with Dutch law,
including the Dutch Standards on Auditing. Our
responsibilities under those standards are further described
in the ‘Our responsibilities for the audit of the financial
statements’ section of our report.
We are independent of Koninklijke Philips N.V. in accordance
with the “Verordening inzake de onafhankelijkheid van
accountants bij assurance-opdrachten” (ViO) and other
relevant independence regulations in the Netherlands.
Furthermore, we have complied with the “Verordening
gedrags- en beroepsregels accountants” (VGBA).
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Audit approach
Summary
Materiality
• Overall materiality of EUR 60 million
• 0.25% of sales
Audit scope
•Sucient and appropriate on account balances
Key audit matters
• Company separation and Finance
Transformation
• Acquisitions and disposals
• Valuation of goodwill
• Accounting for income tax
• Revenue recognition
• Contingent liabilities and provisions from claims,
proceedings and investigations
Materiality
Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements. The materiality affects the nature, timing and
extent of our audit procedures and the evaluation of the
effect of identified misstatements on our opinion.
Based on our professional judgment we determined the
materiality for the financial statements as a whole at EUR
60 million (2014: EUR 80 million). We have reduced
materiality to EUR 60 million in anticipation of the
separation of the company. The materiality is determined
with reference to sales. We consider sales as the most
appropriate benchmark given the nature of the business
and size of the Company and materiality approximates
0.25% of sales. We have also taken into account
misstatements and/or possible misstatements that in our
opinion are material for qualitative reasons for the users of
the financial statements, such as possible misstatements in
the information on remuneration disclosures.